Smith Affiliated Capital Corp

Item 5 - Fees and Compensation for more information. Prior to engaging SAC, the client will be required
to enter into a written agreement setting forth the terms, conditions, and objectives under which we shall
render our services as well as the fees for our management services.

Discretionary Management Services

When providing discretionary services, we have the authority to make investment decisions on behalf of
our clients, including which securities to buy and sell (referred to as “discretionary authority”) consistent
with each client’s objectives and guidelines. Discretionary authorization allows our firm to determine the
specific securities, and the amount of securities, to be purchased or sold without client approval prior to
each transaction. Our discretionary authority can be limited by the written investment policy statement
(“IPS”) that is provided to SAC, or as otherwise agreed upon by SAC and the client at the inception of
SAC’s provision of advisory services.

SAC separately manages investment portfolios to seek to meet each individual client’s stated objectives
and risk tolerances as communicated to SAC at the beginning of our advisory relationship. Typically,
portfolios will align with one or more of our investment strategies as illustrated by our investment
composites.

Portfolio investments and performance are actively managed and monitored on an ongoing basis.
Portfolios are rebalanced as required by changes in market conditions and/or a client’s financial
circumstances to the extent communicated to SAC.

SAC does not participate in any wrap fee programs at this time.

Non-Discretionary Advisory Services

SAC also provides non-discretionary advisory services to clients. In providing these services, SAC may
advise on a wide variety of topics, which may include, but are not limited to, advising on the benefits of
increasing contributions and other information relating to a particular investment, such as details on the
available investment options (e.g., risk and return characteristics, historical return information, prospectus
terms, etc.), concepts such as types of risk (market, inflation, etc.), diversification, dollar cost averaging
and compounding, and general information about asset classes as well as time horizons, risk tolerance
levels, and retirement income needs. SAC may also provide clients with asset allocation modeling, which
involves providing clients with examples of diversified portfolios based on certain investor profiles. This
information may include charts, spreadsheets, and/or case studies that pertain to hypothetical individuals
with differing time horizons and risk profiles.

In providing non-discretionary services, SAC may make recommendations to the client concerning
matters such as asset allocation, liability analysis, investment policy, tax-efficient investment planning,
crossover investing, second opinions, investment diagnostics, portfolio monitoring, and investment
execution.

Sub-Advisory Services

Our firm provides investment management services as a sub-adviser to clients of other registered
investment advisers (“primary advisers”). In these arrangements, the primary adviser maintains the
overall client relationship and supervisory responsibility, while we are granted discretionary authority to
manage designated portions of client assets in accordance with agreed-upon investment guidelines.

We exercise continuous and regular supervisory or management services with respect to assets managed
in sub-advisory relationships. Accordingly, assets managed on a discretionary basis in such relationships
are included in our regulatory assets under management. The primary adviser may also report the same
assets in its regulatory assets under management, as permitted under applicable SEC guidance.

In sub-advisory arrangements, clients enter into an advisory agreement with the primary adviser, which
discloses and authorizes the sub-advisory services provided by SAC and the associated sub-advisory fee.
SAC provides discretionary investment management services pursuant to a sub-advisory agreement with
the primary adviser which discloses and authorizes the sub-advisory services provided by SAC and the
associated sub-advisory fee. Advisory fees are generally charged as a percentage of assets under
management and are subject to negotiation, consistent with the fee schedules described in Item 5.

SAC provides discretionary investment management services pursuant to a sub-advisory agreement with
the primary adviser and does not maintain a separate advisory agreement with the client. Advisory
agreements for sub-advisory services may be terminated by either party upon thirty (30) days’ written
notice. In the event of termination, advisory fees are prorated through the effective date of termination in
accordance with the terms of the applicable advisory agreement.

When acting as a sub-adviser, SAC’s investment authority is limited to fixed income securities and
related instruments, as specified in the applicable sub-advisory agreement and investment guidelines
established by the primary adviser.

Item 4 - Fees and Compensation

Advisory Fees and Compensation

SAC charges a management fee in accordance with the fee schedules below. SAC’s management fee is
subject to negotiation depending on individual client circumstances, such as asset size, liquidity needs,
number of accounts per individual relationship and other factors. SAC offers services to both direct
clients and as a sub-adviser to third-party investment advisers. Fee schedules may differ depending on
whether SAC is engaged directly by a client or indirectly through a sub-advisory relationship.
SAC reserves the right to waive the management fee for certain accounts, such as employee accounts, and
may also waive minimum fees or impose a minimum account size for specific investment strategies. Fees
are not based on performance.
Quarterly bills for existing accounts
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